Wednesday, August 28, 2013

Brazil raises rate 50 bps, as expected, no bias indicated

Brazil's central bank raised its benchmark Selic rate by 50 basis points to 9.0 percent, as expected, saying in a brief statement that it expects this move to contribute to lower inflation and ensure that this trend will continue next year.
The Central Bank of Brazil said the decision by its policy committee, known as Copom, was unanimous and no future bias was indicated.
It is the fourth consecutive rate by the central bank, which has now raised rates by 175 basis points this year to contain inflation. In 2012 the central bank cut rates by 375 basis points to counter slowing growth.
Brazil's Gross Domestic Product expanded by 0.6 percent in the first quarter from the previous quarter for annual growth of 1.9 percent, the third quarter of stronger growth since growth bottomed out at only 0.5 percent in the second quarter of last year.
Inflation eased to 6.27 percent in July from 6.7 percent in June, the highest rate since October 2011. The central bank targets inflation of 4.5 percent, plus/minus 2 percentage points.